Egypt’s Ministry of Planning has reported a significant 4.3% GDP growth for the second quarter of the fiscal year 2024/2025, a notable increase compared to the 2.3% growth achieved during the same period last year. This growth was driven by several key factors, including macroeconomic stability, structural reforms, and a diversified economy that is increasingly focused on tradeable sectors.
Dr. Rania Al-Mashat, Minister of Planning, emphasized that the continued economic recovery is a direct result of financial and monetary policy adjustments undertaken by the government, along with a reduction in public investments, which together have solidified macroeconomic stability and fostered a conducive business environment.
Key Highlights from the Report:
- Macroeconomic Stability and Resilient Growth: The 4.3% growth in Q2 FY 2024/2025 reflects the positive effects of fiscal and monetary policy reforms, combined with a focus on restructuring public investments, all contributing to the resilience of the Egyptian economy despite global challenges.
- Sectoral Growth: The manufacturing sector, especially non-oil manufacturing, led the growth with an impressive 17.74% growth rate, recovering strongly from a 11.56% contraction in the previous year. Tourism continued its strong performance, with a growth of 18% in restaurants and hotels, and the ICT sector grew by 10.4%.
- Private Sector Investment Surge: For the second consecutive quarter, private investments outpaced public investments, accounting for more than 50% of total investments, while public investments declined by 25.7%. This trend highlights the shift towards a market-driven economy, where the private sector plays a pivotal role in growth.
- Sustained Strong Performance in Key Sectors: In addition to manufacturing and tourism, sectors such as finance, transport and storage, construction, and electricity also recorded positive growth, contributing to a diversified economic structure.
- Net Exports: Net exports made a positive contribution to GDP growth, contributing 1.75 percentage points, marking the first time since Q1 FY 2023/2024 that exports have driven growth.
- Challenges: Despite the positive results, some sectors, particularly Suez Canal activities, continued to face challenges due to geopolitical tensions affecting global shipping routes, with revenues from the canal dropping by 70%.
Minister ‘s Remarks:
Dr. Rania Al-Mashat commented, “The continued recovery of Egypt’s GDP growth in Q2 reflects the effectiveness of the corrective policies implemented by the government in both the financial and monetary sectors. The reduction in public investments has contributed to stabilizing the macroeconomy, while structural reforms have diversified Egypt’s economy and enhanced its competitiveness.”
She added, “The private sector is playing an essential role in driving the nation’s development, with its investments increasing by 35.4% in Q2. This reflects the government’s ongoing efforts to enable the private sector and improve its participation in economic growth. This shift towards a market-driven economy, alongside public sector investment governance, is enabling Egypt to maintain resilience against global economic challenges.”
Regarding the manufacturing sector, Dr. Al-Mashat highlighted, “The non-oil manufacturing sector continues to lead the recovery, recording a growth of 17.74% in Q2 of FY 2024/2025, compared to a contraction of 11.56% in the previous year. This growth is supported by the increase in industrial production, facilitated by customs clearance measures for raw materials.”
She concluded, “Despite global challenges and regional geopolitical tensions, we are seeing a sustained positive performance across many sectors. The government is committed to continuing with the economic reforms aimed at fostering a more sustainable, competitive, and diversified economy.”
Notable Sectoral Performances:
- Non-Oil Manufacturing: The sector recorded a growth of 17.74% for the third consecutive quarter, supported by increased industrial production and facilitated customs clearance for raw materials. Key sectors driving this growth include automotive manufacturing (73.4%), ready-made garments (61.4%), beverages (58.9%), and textiles (35.3%).
- Tourism: The tourism sector recorded 18% growth, with 4.41 million tourists visiting Egypt during Q2, and 41.92 million tourist nights. This marks a significant recovery, further supported by the expansion of the hospitality sector.
- ICT: The ICT sector grew by 10.4%, driven by the expansion of digital infrastructure and the increased demand for internet services.
- Private Sector Investments: Private investments accounted for over 50% of total investments, a 35.4% increase from the previous year, signaling continued confidence in the Egyptian economy.
- Suez Canal and Extractive Industries: Although the Suez Canal saw a 70% decline in revenue due to geopolitical tensions, there are expectations for future growth as investments in new discoveries and field developments begin to show results.
Dr. Rania Al-Mashat concluded by reaffirming Egypt’s commitment to structural economic reforms and diversification, emphasizing that these efforts will continue to support a resilient, sustainable, and competitive economy capable of meeting global challenges.
